WEST VIRGINIA CODE

WVC 11 - 13 Q- 10
§11-13Q-10. Credit for small business.
(a) Small business defined. -- For purposes of this section,
the term "small business" means a business which has annual gross
receipts of not more than seven million dollars (including the
gross receipts of any affiliates in its controlled group):
Provided, That beginning the first day of January, two thousand
four, and on the first day of January of each year thereafter, the
commissioner shall prescribe an amount that shall apply in lieu of
the seven million dollar amount during that calendar year. This
amount is prescribed by increasing the seven million dollar amount
by the cost-of-living adjustment for that calendar year. The
requirements for annual gross receipts, once met by a given
taxpayer in that taxable year when qualified investment is first
placed in service or use, may not again be applied to that same
taxpayer in subsequent years to defeat the small business credit to
which the taxpayer gained entitlement in that year.

(1) Cost-of-living adjustment. -- For purposes of subsection
(a), the cost-of-living adjustment for any calendar year is the
percentage (if any) by which the consumer price index for the
preceding calendar year exceeds the consumer price index for the
calendar year two thousand two.

(2) Consumer price index for any calendar year. -- For
purposes of subdivision (1) of this subsection, the consumer price
index for any calendar year is the average of the federal consumer
price index as of the close of the twelve-month period ending on the thirty-first day of August of that calendar year.

(3) Consumer price index. -- For purposes of subdivision (2)
above, the term "Federal Consumer Price Index" means the most
recent consumer price index for all urban consumers published by
the United States department of labor.

(4) Rounding. -- If any increase under subdivision (1) above
is not a multiple of fifty dollars, the increase shall be rounded
to the next lowest multiple of fifty dollars.

(b) Amount of credit allowed. --

(1) Credit allowed. -- An eligible small business taxpayer is
allowed a credit against the portion of taxes imposed by this state
that are attributable to and the direct consequence of the eligible
small business taxpayer's qualified investment in a new or expanded
business in this state which results in the creation of at least
ten new jobs within twelve months after placing qualified
investment into service. The amount of this credit is determined
as provided in subdivision (2) of this subsection.

(2) Amount of credit. -- The annual amount of credit allowable
under this subsection is determined by dividing the amount of the
eligible small business taxpayer's "qualified investment"
(determined under section eight of this article) in "property
purchased for business expansion" (as defined in section three of
this article) by ten. The amount of qualified investment so
apportioned to each year of the ten-year credit period is the
annual measure against which taxpayer's annual new jobs percentage (determined under subsection (d) of this section,) is applied. The
product of this calculation establishes the maximum amount of
credit allowable each year for ten consecutive years under this
section due to the qualified investment.

(3) Application of credit. -- The annual credit allowance must
be taken beginning with the taxable year in which the taxpayer
places the qualified investment into service or use in this state,
unless the taxpayer elects to delay the beginning of the ten-year
credit period until the next succeeding taxable year. This
election is made in the annual income tax return filed under this
chapter by the taxpayer for the taxable year in which the qualified
investment is first placed in service or use. Once made, this
election cannot be revoked. The annual credit allowance shall be
taken and applied in the manner prescribed in section seven of this
article.

(c) New jobs. -- The term "new jobs" has the meaning ascribed
to it in section three of this article.

(1) The term "new employee" has the meaning ascribed to it in
section three of this article: Provided, That this term does not
include employees filling new jobs who:

(A) Are related individuals, as defined in subsection (i),
section 51 of the Internal Revenue Code of 1986, or a person who
owns ten percent or more of the business with such ownership
interest to be determined under rules set forth in subsection (b),
section 267 of said Internal Revenue Code; or

(B) Worked for the taxpayer during the six-month period ending
on the date the taxpayer's qualified investment is placed in
service or use and is rehired by the taxpayer during the six-month
period beginning on the date taxpayer's qualified investment is
placed in service or use.

(2) When a job is attributable. -- An employee's position is
directly attributable to the qualified investment if:

(A) The employee's service is performed or his or her base of
operations is at the new or expanded business facility;

(B) The position did not exist prior to the construction,
renovation, expansion or acquisition of the business facility and
the making of the qualified investment; and

(C) But for the qualified investment, the position would not
have existed.

(d) New jobs percentage. -- The annual new jobs percentage is
based on the number of new jobs created in this state by the
taxpayer directly attributable to taxpayer's qualified investment.

(1) If at least ten new jobs are created and filled during the
taxable year in which the qualified investment is placed in service
or use, the applicable new jobs percentage is ten percent.

(2) During each of the remaining nine years of the ten-year
credit period, the annual new jobs percentage is based on the
average number of new jobs filled during that taxable year:
Provided, That for purposes of estimating the new jobs percentage
that will be applicable for each subsequent credit year, the taxpayer shall use the new jobs percentage allowable for the
taxable year immediately prior thereto, and in the annual income
tax return filed under this chapter for the then current tax year,
the taxpayer shall redetermine his or her allowable new jobs
percentage for that year based on the average number of new
employees employed in new jobs during that year (determined on a
monthly basis) created as the direct result of the taxpayer's
qualified investment.

(e) Certification of new jobs. -- With the annual income tax
return filed under this chapter for each taxable year during the
ten-year credit period, the taxpayer shall certify:

(1) The new jobs percentage for that taxable year;

(2) The amount of the credit allowance for that year;

(3) If the business is a partnership, limited liability
company or electing small business corporation, the amount of
credit allocated to the partners, members or shareholders, as the
case may be for that year;

(4) That qualified investment property continue to be used in
the business, or if any of it was disposed of during the year the
date of disposition and that the property was not disposed of prior
to expiration of its useful life, as determined under section eight
of this article; and

(5) That the new jobs created by the qualified investment
continue to exist and are filled by persons who meet the definition
of new employee (as defined in this section).

(f) Small business project. -- A small business may apply to
the commissioner under section six of this article for
certification as a project if that project will create at least ten
new jobs.

(g) Rules. -- The commissioner may prescribe such rules as he
or she determines necessary in order to determine the amount of
credit allowed under this section to a taxpayer; to verify a
taxpayer's continued entitlement to claim the credit; and to verify
proper application of the credit allowed.

(h) The commissioner may require a taxpayer intending to claim
credit under this section to file with the commissioner a notice of
intent to claim this credit, before the taxpayer begins reducing
his or her monthly or quarterly installment payments of estimated
tax for the credit provided in this section.

Note: WV Code updated with legislation passed through the 2016 Regular Session
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